Understanding the molecular components of insulin signaling is relevant to effectively manage insulin resistance. We investigated the phenotype of the TMEM127 tumor suppressor gene deficiency in vivo. Whole-body Tmem127 knockout mice have decreased adiposity and maintain insulin sensitivity, low hepatic fat deposition and peripheral glucose clearance after a high-fat diet. Liver-specific and adipose-specific Tmem127 deletion partially overlap global Tmem127 loss: liver Tmem127 promotes hepatic gluconeogenesis and inhibits peripheral glucose uptake, while adipose Tmem127 downregulates adipogenesis and hepatic glucose production. mTORC2 is activated in TMEM127-deficient hepatocytes suggesting that it interacts with TMEM127 to control insulin sensitivity. Murine hepatic Tmem127 expression is increased in insulin-resistant states and is reversed by diet or the insulin sensitizer pioglitazone. Importantly, human liver TMEM127 expression correlates with steatohepatitis and insulin resistance. Our results suggest that besides tumor suppression activities, TMEM127 is a nutrient-sensing component of glucose/lipid homeostasis and may be a target in insulin resistance.